The goal of the proposed project is better understanding of mechanisms in the development of externalizing problems, including conduct and attention problems, with special emphasis on neural mechanisms. From a developmental perspective it is important to study neural functioning in relation to externalizing behavior befor behavior problems have become established. With more knowledge of the processes, early detection and prevention approaches may become more successful. The proposed study appears to be the first to chart the development of neural functioning in relation to externalizing problems in early childhood. The proposed longitudinal research seeks to identify neural mechanisms in the development of externalizing problems among children 2.5-3.5 years of age using event-related potentials (ERPs). ERPs are neural responses to stimuli measured by electroencephalography (EEG), with the potential to be biomarkers for dimensions of psychopathology at earlier ages than when externalizing symptoms typically become salient. The central hypothesis based on previous findings is that ERPs, including the N2 and P3 components, will predict the development of externalizing behavior problems, as mediated by self-regulation deficits. The rationale of the proposed research is that understanding early neural risk factors and mechanisms in externalizing problems may lead to more accurate identification of at-risk children and modifiable intermediate phenotypes. This in turn can lead to more cost-effective interventions and even prevention of behavior problems. The approach is innovative in longitudinally examining neural biomarkers in early childhood as predictors of externalizing problems, dimensions of disinhibition and sustained attention deficits rather than diagnostic categories. The proposed research is significant because it will identify more accurate early developmental mechanisms than behavioral markers by themselves, which may translate to more successful prevention. The proposed research will also identify better early behavioral indicators of the neural mechanisms of externalizing problems. These intermediate phenotypes for externalizing problems can become clinically practical assessment tools in early childhood. The project includes two specific aims: 1) Identify early neural biomarkers of the development of externalizing problems, and 2) Determine mechanisms underlying the development of externalizing problems. Aim 1 will examine whether the N2 and P3 ERP components predict the development of later externalizing problems reported by parents and secondary caregivers. Aim 2 will test whether the N2 and P3 predict later self-regulation deficits on lab tasks, which, in tun, lead to externalizing problems. We will also test other neural biomarkers to increase sensitivity and specificity for predicting the development of later externalizing problems. The study will follow children from 30 to 42 months, an era of accelerated neural development and increased externalizing problems that are becoming stable. Externalizing problems will be reported by parents and secondary caregivers. Self-regulation problems will be measured by behavioral tasks.